Protesters at Brazil's Santos port occupy Chinese ship

Container terminal operators work next to containers on a cargo ship at Brazil's main ocean port in Santos city September 20, 2012. REUTERS/Nacho Doce

SAO PAULO (Reuters) - Brazilian workers at the port of Santos occupied the Chinese ship Zhen Hua 10 early on Monday in protest against the government’s plan to modernize Brazil’s ports, the head of the main labor union representing the protesters said.

The Zhen Hua 10 is carrying cranes that will be deployed at the private container terminal Embraport, owned by local conglomerate Odebrecht, trading company Coimex and the United Arab Emirates’ DP World.

The cranes will be used to load and unload shipping containers at the privately run terminal, which is unusual for Brazil, where the vast majority of the port terminals are still under state control.

“Workers occupied the Chinese ship to stop it from unloading as a start of protest against Provisional Measure 595. I will be in talks with them to resolve this,” Paulo Pereira da Silva, president of the Força Sindical Labor Union, told Reuters.

The government plans to attract $27 billion in private sector investments in the next few years to modernize Brazil’s underdeveloped ports and to reform the country’s 20-year-old regulatory framework under the measure 595.

Port authorities at Santos had no comment on the situation which they consider outside the domain of the port, given that Embraport is a privately owned terminal. An Embraport spokeswoman said executives were trying to talk to protesters to negotiate an end to the occupation of the ship.

Workers’ unions at the ports want to defeat the government’s proposal, which they say will cut wages and legal safeguards. Under the new measure, terminal operators would be allowed to recruit their own labor, ending an obligation to source workers through a centralized agency called the OGMO that doles out available shifts.

Embraport, as a purely private enterprise, will not need to go through the OGMO to fill its shifts.

The private sector port operators say the current system is one reason Brazil’s port costs are among the world’s highest.

Pereira said union workers at Santos have planned a six-hour walkout on Friday in protest of the reform measures and are planning an open-ended, general strike at all ports on March 18 if talks with the government fail to address their concerns.

The timing of these protests is particularly sensitive for global commodities markets after the droughts that sapped output from the U.S. and South American grain crops over the last year.

Brazil is entering the peak of its grains harvest from which it is expected to ship a record amount of soybeans and corn to refill the world’s grain stores.

Sao Paulo state, which is home to Santos Port, is also about to begin crushing a record sugar cane crop in a few weeks, from which it is expected to ship nearly half of the world’s sugar exports and large volumes of ethanol to the U.S. market.